Features

Don’t trip up on the high cost of a holiday loan

Jessica Bown

Pay Later allows users to borrow up to £2,000 towards a holiday . Experts warn this could be an expensive way to fund a deal (Rex Features)

CASH-STRAPPED holidaymakers are being offered an alternative way to fund their travel dreams — but critics warn that it could prove very expensive.

Fly Now, Pay Later, which launched this month, is a payday loan aimed at people who do not want to miss out on holiday deals. It allows users to borrow up to £2,000 over anything from a few days to 12 months to pay for flights, hotels and package holidays.

The representative APR is 19.9%, while the top rate charged to those with low credit scores will be 34.9%.

Bob Atkinson at comparison website Moneysupermarket, said: “With a typical rate of 19.9%, Fly Now, Pay Later is an expensive way to fund your break.”

This is particularly true when there are 0% credit cards offering interest-free borrowing for up to 18 months. Rachel Springall at the data firm Moneyfacts said: “Saving for a trip remains the best option,